Less than six weeks after it was declared insolvent and ordered by state regulators to suspend its operations, the loans, deposits and other assets of the $14 million Bensenville Community Credit Union in Illinois were purchased by the $756 million Credit Union 1 in Rantoul, Ill., on July 31.
In the news release posted on its site late Thursday, American Share Insurance said it was appointed the liquidating agent of Bensenville Community CU when the Illinois Division of Financial Institution ordered the credit union to be closed on July 31.
The former credit union chartered in 1934 now operates as Credit Union 1.
When the Illinois Division of Financial Institutions issued a suspension of operations order June 16, it also appointed Credit Union 1 President/CEO Paul Simons the manager/trustee of Bensenville Community CU allowing it to remain operating until merger partner could be found.
In addition, James McNeil, an internal auditor for Credit Union 1, was named interim manager of Bensenville Community CU in February after the resignation of Roger Peters, former president/CEO of the Bensenville Community CU. Following Peters' departure, two other credit union employees also resigned, McNeil said.
Simons, a former ASI board member, said Credit Union 1 was approached by state regulators to manage the credit union until it could find a suitable merger partner.
Though Bensenville Community's sole branch is expected to remain open through the fall, it will eventually be closed because Credit Union 1 operates a branch about five miles away in North Lake, Simons said.
Bensenville Community's six credit union employees will have “every opportunity” to apply for jobs for which they are qualified at Credit Union 1, he said.
Simons said he was named as Bensenville Community's manager/trustee because Credit Union 1 worked with state regulators over the years with different problem cases that they have had.
“Typically, we always do mergers, but in this case, the credit union actually was liquidated and then it became a purchase and assumption,” Simons said. “We purchased substantially all of the assets and substantially all of the liabilities.”
Simons said at least five other credit unions were invited by ASI to conduct due diligence and consider bidding for the purchase and assumption of Bensenville Community.
“When any credit union came into the office to do their due diligence, McNeill removed himself because we wanted to make sure there was no hint that we had any kind of insider knowledge,” Simons said. “He left the other credit unions that were reviewing and doing their due diligence to talk with his assistant, talk to the staff,” he said. “He left himself out of it.”
Simons also said McNeill was not involved in Credit Union 1's due diligence process.
McNeil said the members are receiving a notice of the purchase as soon as it can be mailed to them.
However, members were informed at the credit union's annual meeting May that it was seeking a merger partner.
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